FOOD SECURITY SPECIAL SECTION

Autumn 2012

by Dacian Cioloş

It’s always difficult to find an issue on which all economists can agree, yet there’s one key conclusion on which agricultural economists now apparently concur. It is that food demand is growing much more quickly than supply, so in the medium to long term we are facing an overall rise in food prices along with a serious and structural food security threat, most notably in developing countries.

How can we produce more, especially in regions of the world where the agricultural potential is under-used? And what, too, can we do to reduce waste and ensure long-term productivity growth where food production is efficient but distribution isn’t? Politicians and food policy experts have a role to play here, and in EU terms the Common Agriculture Policy (CAP) will be crucially important, together with targeted policies to increase global food production, through research and innovation and by supporting local food supply efforts in developing countries.

A relatively new element needs to be taken into account, especially in the most productive parts of the world. It’s a question that was unheard of 50 years ago when the CAP was conceived, but it is so important now that it was discussed by world leaders in Rio in June. It is the question of sustainability.

In the EU, 45% of our soil resources are under threat, as is 40% of our water. Our productivity gains of recent decades have put such a strain on our natural resources that if we fail to pay attention we don’t just risk losing some of our biodiversity and natural habitats, but some of our food production capacity, too.

Because the benefits of sustainable agricultural production have not yet been incorporated into economic modelling – and of course the market doesn’t reward these long-term considerations – we need to use agricultural policy to make sure that sustainability is incorporated into the food security equation. That’s why we in the European Commission have made “greening” a central part of our proposals for reform of the CAP from 2014 to 2020. We want 30% of direct payments farmers receive from EU taxpayers to be directly linked to the provision of certain ecosystem services and sustainable agricultural practices.

In Europe, all our efforts to consolidate must go hand-in-hand with policies on safety, quality and the sustainable use of our natural resources. Without this, Europe would run the risk in just a few years of contributing not to food security, but to insecurity.

There are two particularly important elements in our proposals on sustainability. First, the European Innovation Partnerships we are establishing to bring researchers and farmers closer together and accelerate technology transfers from the laboratory to the field. Second, our Farm Advisory Services, which should help farmers learn about new production practices and developments that that they can apply them in practice. Under the EU’s 8th Framework Programme for research & innovation, we propose that the ring-fenced funding for agricultural research will be doubled to more than €4bn.

Among the policy responses to the food security challenge there’s also our Resource Efficiency Roadmap, which aims to halve food waste by 2020. At both EU level and within the G20 we intend to increase market transparency and limit the role of speculators exacerbating in market volatility.

Trade is set to become a more important element than ever for the EU agricultural economy, but in the coming years we will see our exports increasingly concentrated on added-value quality products rather than commodities. The food security issue won’t just be linked to the volumes of available food, but also to food safety, diversity and quality.

Along with these aspects of EU thinking, development policy will doubtless be the most important tool for addressing food security problems in the poorest regions of the world. This is because solutions are more likely to come from increasing local production and improving infrastructure in Africa and other parts of the developing world, than from pushing up production where farming is already efficient. About 500mn smallholdings of less than two hectares provide a living and food for two billion people in Asia and Africa. Imagine what a small productivity gain multiplied by half a billion could mean for food security at global level.

I believe, though, that any such gains can only be made permanent if they are accompanied by the right policy framework. That’s why the Commission has an initiative called ENPARD (European Neighbourhood Policy for Agriculture and Rural Development) as part of our European Neighbourhood Policy. Drafted in the wake of the Arab spring, when predominantly rural communities turned against the established regimes, it aims at helping to establish the new structures for agricultural and rural development. These include elements as basic as access to land, education and training, access to credit, a stable food chain, and the administrative capacity to elaborate and implement policies. As I witnessed in my own native Romania in the 1990s, this policy framework is crucial to encouraging much-needed private and public investment in sustainable agriculture.

The EU also needs to play an increasingly important role in the future in co-ordinating the world’s major agricultural players in their efforts to stem price volatility. The right responses to this problem include greater transparency at international level on market forecasts, the sharing on food stocks and a major effort to reconcile protectionism and the balance of regional markets.

The global food security challenge is very real, and the EU can show vital leadership in addressing the problem through its policy initiatives. That means making sustainability a main plank of the future CAP, and it also means that fresh initiatives to help establish a new generation of farm policies in those parts of the world where the food security threat is gravest of all.

Dacian Cioloş is the European Commissioner for agriculture and rural development